Indian govt plans a regulator to oversee taxi aggregators like Uber & Ola

Centre and states took stock of surge pricing by taxi aggregators Uber and Ola after a raging debate on the practice by these companies in the capital.Rajat Arora | ET Bureau | Updated: April 23, 2016, 09:19 IST

The government proposes to set up public transport regulators in each state to oversee the functioning of cab aggregation companies, define commercial car-pooling to remove ambiguity, set limits on surge pricing to protect customers and make KYC mandatory to ensure passenger safety.

The centre and the states took stock of surge pricing by taxi aggregatorsUber and Ola after a raging debate on the practice by these companies in the capital.

Top officials of state transport departments deliberated upon the need to put in place a framework for the dynamic pricing mechanism, which enables these cab companies to charge higher fares when demand is high.

"The issue of surge pricing was raised," said an official who was present at the meeting, called by the Ministry of Road Transport and Highways to discuss improving the ease of transport and road safety.

States such as Delhi and Karnataka have already imposed restrictions on surge pricing. Uber and Ola have suspended the practice in the capital after Delhi Chief Minister Arvind Kejriwal said his government would act against them.

The central government is of the view that there should be a cap on surge pricing and it should not exceed 40-50% of the base fare. States including Rajasthan and Gujarat have echoed the same views, the official said.

The centre proposed setting up a public transportation regulatory authority at the state level to prepare guidelines for taxi aggregators and provide clarity in transportation rules.

"The public transportation sector has been disrupted by these technology platforms. There’s a need for a state-level authority to prepare the rules and deal with issues like surge pricing and car-pooling," a senior government official said.

The government will also prepare a definition of commercial car-pooling in the Motors Vehicles Act.

Companies such as BlaBlaCar, Uber and Ola offer commercial car sharing, a service that doesn’t fall under the ambit of any law.

"We’ll be making passenger KYC (know your customer) mandatory for all such services so that there is user safety. Also, a definition would help regulate this sector," a senior transport ministry official said.

The issue of allowing bike taxis to ply in cities was also taken up.

The central government, along with state governments, is working to reform the transportation sector in the country. The government has proposed temporary suspension of driving licences in case of drunk driving and penalising vehicle owners in case minors are caught driving vehicles. The government has also proposed doing away with the dress code for drivers of commercial vehicles.

The centre asked the state governments to consider whether the idea of capping registration of new vehicles in congested cities is feasible.